Japanese Stocks Fall as Banks Lead Declines; Fisheries Rise

April 6 (Bloomberg) -- Japanese stocks fell, with
banks leading declines as Tokyo Electric Power Co.
dropped, and on concern about the outlook for company
profits.

Tokyo Electric Power, operator of the nuclear
power plant damaged by the March 11 earthquake and
also known as Tepco, slumped 6.9 percent, the biggest
decline on the Nikkei 225 Stock Average. Sumitomo
Mitsui Financial Group Inc., whose banking unit is the
sixth-largest shareholder in Tepco, fell 2 percent as
lenders led decreases on the Topix index. Maruha
Nichiro Holdings Inc., which sells seafood, advanced
2.6 percent after Tepco said it stopped highly
radioactive water leaking into the sea from a pit near
one of its reactors.

“The impact on corporate earnings from the
earthquake is likely to be huge,” said Seiichiro
Iwamoto, who helps oversee $35 billion in Tokyo at
Mizuho Asset Management Co. “It’s hard to read the
top line on earnings. Bank shares are falling as we
can’t see a bottom to the decline in Tepco shares.”

The Nikkei 225 Stock Average slipped 0.3 percent
to 9,584.37 at the close of trading in Tokyo. The
gauge has fallen 8.2 percent from the close on March
10, the day before Japan was hit by a magnitude-9
earthquake and tsunami. The broader Topix index lost
0.9 percent to 839.61 today, with about five shares
falling for each that gained on the 1,666-member gauge.

“The flipside of the recovery in the U.S.
economy is that there’s growing awareness that there
will be an end to monetary easing,” said Hiroichi
Nishi, an equities manager in Tokyo at Nikko Cordial
Securities Inc.

Tepco shares dropped 6.9 percent to 337 yen,
declining for a fourth consecutive day. The company
has lost about 84 percent of its market value since
the earthquake, and has breached its record low since
listing in August 1951.

The shares briefly made gains in the afternoon
session today, rising as much as 9.4 percent and
reversing declines of as much as 19 percent.

Tepco shares were the most actively traded by
volume and value in Japan today. The volume of Tepco
shares traded today was also the highest on record,
with 303 million shares changing hands.

Investor Support

“With the affordability of the stock in the
background, investors aiming for short-term pricing
are coming in, and it appears some investors, with
strong volition, are trying to support the stock as
it’s a key industry representative,” said Mitsuyuki
Kobayashi, president of Metzler Asset Management
(Japan) Ltd.

“There is no pause in selling on the precaution
that investors may be held responsible, or from the
potential losses from damages paid.’

The utility may make a preliminary compensation
payment of 1 million yen ($12,000) to each household
near its crippled Dai-Ichi nuclear plant, Kyodo News
reported.

Fishing Stocks

“As well as large financial institutions being
the main holders of Tepco stocks, they also have many
individual investors as shareholders, and the never-ending decline in their shares is weighing on the
market,” said Kenichi Hirano, general manager and
strategist at Tachibana Securities Co. in Tokyo.

Fishing companies as a group rose the most among
the Topix index’s sub-indexes today. Maruha Nichiro
advanced 2.6 percent to 118 yen, closing higher for
the first time in eight days. Nippon Suisan Kaisha
Ltd., which fishes and produces seafood products,
gained 1.9 percent to 216 yen. Hohsui Corp., a
subsidiary of Nippon Suisan, which sells frozen
seafood, climbed 2.2 percent to 92 yen.

Tepco said it stopped highly radioactive water
from leaking into the sea from a pit from the
Fukushima Dai-Ichi station after five days of trying
to stem the flow.

“It’s a very positive step to stop radioactive
water leaking into the sea because the most important
thing in a nuclear accident is to reduce the threat to
the environment,” said Hironobu Unesaki, a nuclear
engineering professor at Kyoto University.